This seems a bit left field. If you were a $100MM startup I could buy this argument but at $3.4B you better believe that their valuation is tied to their gross

This seems a bit left field. If you were a $100MM startup I could buy this argument but at $3.4B you better believe that their valuation is tied to their gross volume of goods and revenue moving through their platform. Which is why the recently announced a change to tipping, where it would no longer be hanlded separately but instead as part of the regular checkout so as to make their revenue numbers look better. They could certainly look into an advertising model for virtual shelf space, but that will be a significantly smaller amount of money than what they are doing in grocery delivery. This is the same play as Seamless/Grubhub, and while they have a "promoted" listing which generates revenue, the majority of their revenue still comes from creating and order and doing the delivery. The real benefit to Instacart from an investor perspective is that they are taking a distributed market and consolidating it into one single player. So while some stores may do their own delivery, by consolidating that space into a single player they are able to create tremendous volume. Now, at 33% the value of whole foods that's a different matter. But there are some attractive pieces to Instacart's revenue story. They don't stock inventory, so there aren't many carrying costs, they are charging 20% on the order which means they directly benefit from customers spending more and you can quickly see that their immediate revenue model assuming they can keep costs under control is definitely enough to justify the price. The real question is how much money they are losing and if they are able to become profitable in the long run, but that will be a question that is decided well post IPO.